Stock futures are flat ahead of the Fed decision

Traders work on the floor of the New York Stock Exchange (NYSE), October 12, 2021.

Brendan McDermid | Reuters

U.S. stock futures were slightly changed Tuesday night as investors awaited a decision from the Federal Reserve on their downsizing plan.

Dow Jones Industrial Average futures fell 28 points or 0.07 percent. Futures on the S&P 500 and Nasdaq 100 fell by 0.08% and 0.1%, respectively.

Lift rose 10.3% in after-hours trading to a better-than-expected third-quarter result. Zillow fell 8% after announcing it would close its home-buying and flipping business. Shares in Bed Bath & Beyond rose following a partnership announcement with Kroger, but the 80% increase that followed was likely driven by a brief squeeze.

In common trade, the Dow rose 138.79 points to 36,052.63. The S&P 500 rose 0.3% and the Nasdaq Composite rose 0.3%. All three major averages closed records for the third session in a row. Small cap Russell 2000 rose slightly and closed at a record high.

Investors are focused on the Federal Reserve, which is expected to announce the end of its bond buying program on Wednesday at the end of its two-day meeting. They will also listen for clues as to when the central bank plans to raise interest rates.

Still, stocks rose Tuesday as companies continued to deliver strong earnings reports. Of the S&P 500 companies that have reported this earnings season so far, 83% of them have beaten consensus expectations, according to FactSet. This is despite ongoing supply chain disruptions, labor challenges, commodity inflation, central bank policy and Covid risk.

“Equities are like the Energizer Bunny as they continue to soar to new heights and show no signs of fatigue,” said Ryan Detrick, chief market strategist for LPL Financial. “We understand all the concerns out there, but the bottom line is that earnings continue to come in far better than expected and are helping to justify equities at current levels.”

These heights make a potential rally at the end of the year more conceivable for investors.

“The primary market trend appears to be higher,” said Keith Lerner, co-chief investment officer at Truist. “In the eight periods since 1950, when stocks rose more than 20% to October as they are this year, the S&P 500 beat additional gains at the end of the year 100% of the time, with an average gain of 6.2%.”

Weekly mortgage applications and ADP salary data are also scheduled to be released.

CVS and Marriott are scheduled to report earnings by Wednesday. MGM Resorts, Etsy and Electronic Arts will report after the clock.

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